Working Papers

"The Troubled Asset Relief Program's Effect on Firm Entry over the Business Cycle" [Job Market Paper]

Using census data on county level business dynamics I estimate the impacts of the Treasury Department's Capital Purchase Program on firm entry, firm exit, employment expansion, and employment contraction following the 2008 Financial Crisis. The Capital Purchase Program bought stock in banks to shore up risky assets and ideally induce banks to extend new loans to credit worthy households and small businesses. If the Capital Purchase Program made banks more likely to provide credit to local firms and entrepreneurs, counties should have seen improved firm entry and employment expansion and decreased firm exit and employment contraction relative to untreated counties. Using synthetic control methods I estimate the direct and spillover effects of a county having a bank receive Capital Purchase Program funds on local business dynamics in the seven years following treatment. The estimates show the CPP had small impacts on firm entry, but caused moderate improvements in long run firm exit, expansion, and contraction behavior. Working Paper

"Linear Hypothesis Tests for Fixed Effects with Serially Correlated Panels"

I develop a joint hypothesis test over fixed effects in large $n$ small $T$ panel data models with symmetric serial correlation among individuals. This enables joint hypothesis tests over inconsistent fixed effects estimates, including the traditional varying intercept model as well as models with individual specific slope coefficients. I establish two different set of assumptions where a feasible tests exist. The first assumption requires that individual errors follow a stationary $\ARp$ process. Under this assumption all second and fourth cross product moments can be consistently estimated, while allowing for both individual specific hypothesis to be imposed on the data and covariates to vary across individuals and time with individual specific slopes. The second set of assumptions requires the presence of a known group structure of individuals such that there are at least two people in each group, and that the covariate values and coefficient slopes are shared among all individuals in that group. This set of assumptions enable estimation of a completely unconstrained variance-covariance matrix and higher cross product moments for individuals. Preliminary Working Paper

"Impacts of Taxes on Firm Entry Rates along State Borders" with Georgeanne M. Artz and Peter F. Orazem

This paper uses a border discontinuity approach to estimate the impacts of taxes on firm entry rates between neighboring states. We utilize matched county pairs as an approximate bandwidth around the discontinuity in state policies imposed at their border. This controls for unobserved location specific determinants of firm entry, as well as policy responses to shocks shared across borders. We estimate the impacts of property, income, sales, corporate, capital gains, workers compensation, and unemployment insurance top marginal tax rates on the differences in firm entry between counties. Our array of taxes controls for joint changes in tax policy that governments may implement to accomplish policy goals. We estimate this impact using a sample of 107 state-border pairs between 1999 and 2009. Our results indicate that property and sales taxes have the largest negative effect on firm start up rates, and in more recent years, income taxes as well. Working Paper

Published Papers

"Do State Business Climate Indicators Explain Relative Economic Growth at State Borders?" with Georgeanne M. Artz, Kevin D. Duncan, Arthur P. Hall, Peter F. Orazem; Forthcoming Journal of Regional Science

This study submits eleven business climate indexes to tests of their ability to predict economic performance on either side of state borders. Our results show that most business climate indexes have no ability to predict relative economic growth regardless of how growth is measured. Some are negatively correlated with relative growth. Many are better at reporting past growth than at predicting the future. In the end, the most predictive business climate index is the Grant Thornton Index which was discontinued in 1989. Working Paper

Published Version